Critical Trading Lessons - Trader Psychology: Don't Trade With Your Ego
InvestorEducation / Trader Psychology Aug 15, 2012 - 04:03 AM GMTBy: EWI
Senior Analyst Jeffrey Kennedy is a busy man. Along with his regular duties at Elliott Wave International, he prepares 3-5 video lessons each week that teach technical traders how to anticipate -- and act on -- trading opportunities.
Subscribers say that what sets Jeffrey's educational service apart is his unique ability to combine easy-to-understand, actionable advice along with a no-nonsense, uncensored look at trading psychology.
Of course, Elliott Wave Junctures is full of useful charts and technical tips. Yet some of Jeffrey's most priceless content is his straightforward discussion of the problems that most traders face -- but few experts talk about.
When I asked Jeffrey about one such lesson that resonated with his subscribers (we call it his "Patience and Persistence" episode), here's what he said:
I think that hit home because it was honest -- someone is finally talking about the elephant in the room.
Patience. Because of modern society, everything is "instant gratification." Mobile communication, fast food, you name it. Whenever you're counting waves, there's a tendency to rush the wave count. It's something that you'll always have to be on guard against. That's why I insist on confirming price action. When the pattern is indeed done, it will tell you it's done. When you're not patient, you tend to want to pick tops and bottoms.
Persistence: Just because things don't unfold exactly the way you want doesn't mean you're wrong. If you ask for a raise, and you only get 60% of what you asked for, that's not a failure. What's important is the movement; the general trend; your overall assessment of motive wave vs. corrective wave.
Being able to top-tick or bottom-tick the market is ego trading, and it'll cost you.
In my mind, there's nothing in the world that's worth anything that doesn't take a little bit of patience and persistence to achieve. A relationship, an education or career, a healthy body: how do you get these things? You keep working at it; you keep showing up every day.
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This article was syndicated by Elliott Wave International and was originally published under the headline Trading Psychology: Don't Trade With Your Ego. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.
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